Book Review: Beauty Pays

I've written a couple of times about the effects of beauty on economic outcomes (see here and here). So, I was quite interested to read Daniel Hamermesh's 2011 book Beauty Pays: Why Attractive People are More Successful. Hamermesh is the godfather of this strand of the labour economics literature, having been involved in many of the key studies. This is a book where he lays out the state of the literature (as it was in 2011, although it might be fair to say that it hasn't moved on a whole lot since).

The book covers some key themes. First among these is expressed in the title of the book: beauty pays. Those who are more attractive earn a wage premium compared with those who are less attractive. By now, this finding is incontrovertible, although still controversial. How big is the premium? Hamermesh notes that the effect of good looks on earnings for men is about the same as an additional one and a half years of education, or five years of work experience. The premium for women is about two-thirds as large. When expressed over a lifetime, the difference between a good-looking and a bad-looking worker is about US$230,000 in lifetime earnings. So, it's not a small effect, but again it is less for women.

I know some of you will be wondering why the beauty premium is lower for women (as with many of you, I would have thought it would be larger). Hamermesh explains that:

...one explanation for the surprisingly larger effect of looks on men's than on women's earnings is that women have much more latitude than men in choosing whether or not to work for pay, and that beauty affects that choice. Part of the reason for the gender difference in the effects of beauty on earnings is that beauty alters the mix of female workers, so that the distribution of workers contains proportionately fewer below-average looking women. That is less true for men.

In other words, the less-good-looking women are less likely to work at all (compared with less-good-looking men), which means the difference between good-looking and less-good-looking women in terms of observed wages is reduced compared with the difference between good-looking and less-good-looking men.

Hamermesh then gives an excellent discussion of reasons why the beauty premium may arise due to the actions of employers. The overall discussion is difficult to excerpt, but this bit in particular caught my attention:

If we think of looks as part of a product or service, and if we assume that potential customers value looks, then it is clear how better-looking employees can raise a competitive company's sales. At the same average cost of all the other inputs into the product and at the same price charged, customers will be more likely to buy the product and/or will be willing to buy more of it. More will be sold; and the company will expand at the expense of its competitors.

It is a similar argue to one my wife is making in her PhD thesis about the work of baristas and how consumers consume the product (coffee) as well as the experience, which includes the emotional labour of the barista. Both aspects are valued by the customer.

However, there are a couple of parts of the book where I must disagree with Hamermesh. He argues that the beauty premium is socially productive, i.e. that it is associated with greater economic output and production, since good looking workers are more likely to sell things than less-good-looking workers. I'm less convinced on this point, since it ignores the fact that the beauty premium dissuades some workers from working entirely (see the paragraph on gender differences above). So, while the beauty premium might increase sales, it also has an offsetting negative impact on economic output and it isn't clear which effect (positive or negative) would be larger.

Most of the time, Hamermesh addresses any concerns I have with the book in the later chapters. He finishes the book with arguments for why ugly workers should be protected, which relies on an assumption that the cost of such a policy (through reducing the beauty premium, which is socially productive) would be outweighed by benefits to ugly workers. Again, I'm unconvinced, but there is plenty of scope for future research to address that question as there is little evidence in either direction. Hamermesh does note that helping ugly workers may come with unintended opportunity costs:

Put in stark terms, aiding workers in one disadvantaged group tends to reduce wages and take jobs away from those in other disadvantaged groups.

In that case, maybe it is better not to help ugly workers?

Overall, if you are interested in the economics of beauty, this is a great place to start. Hamermesh does an excellent job of covering the literature. Regardless of whether you agree or disagree with the normative conclusions he draws, this book is a good read.